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RAJASTHAN FINANCIAL CORPORATION
( FINANCE SECTION )

Ref.No.RFC/F.8(1568)/ 260 Dated : 06.05.2002

C I R C U L A R

The prevalent guidelines for disbursement of loan provide that disbursement against building can be released if the construction is made in accordance with the approved map/site plan. No disbursement against building is normally being considered, if there are variations or encroachments in the construction of building.

The policy was reviewed in the PCC meeting held on 17.04.2002 and it was felt that a strict adherence to the above policy may cause hardship to the loanee concern and stop speedy process of disbursement. It has, therefore, been decided that disbursement against building may be released in case of compoundable minor variations/ encroachments of compoundable nature after ascertaing that :

i) the investment made on such building portion ( which is not as per approved map/site plan) shall be excluded for the purpose of working out acceptable value and for release of eligible disbursement.

ii) the acceptable value shall also be reduced to the extent of likely expenditure to be incurred for restoring the position as per approved map/site plan in case the competent/local authority does not allow variation /encroachment.

iii) the disbursing authority shall ensure while making disbursement against building that the remaining building portion would be safe and restoration/reconstruction as per approved map would be feasible in case unauthorised construction is demolished by the concerned authorities in future.

All concerned are advised to make a note of above.

(R.S. Gupta)
GEN.MANAGER (FINANCE)


RAJASTHAN FINANCIAL CORPORATION
( FINANCE SECTION )

Udyog Bhawan,
Tilak Marg,
JAIPUR-302 005.

Ref.No.RFC/Fin/F.8(1568)/ Dated : 23.09.2003

C I R C U L A R

Reg : Reasonable restrictions on infructuous expenditure debited to loanee accounts as other money

 While making a review of units under possession of Dholpur Branch, it was observed that in one case M/s. Agro Polythene Industries, a sum of Rs. 3700/- was disbursed and Rs. 7000/- was outstanding on the date of possession. Further expenses totalling to Rs. 35000/- were debited as other money to this account (upto 31.03.2003) with the result the amount of other money has exceeded even the disbursed amount/ MRV of the unit.

The expenses such as watch & ward expenses, advertisement charges etc. incurred for recovery efforts are net cash outgo for the Corporation and are cost bearing. Deficit in recovery of such amount is direct financial loss to the Corporation.

A blanket ban is, therefore, imposed with immediate effect on incurring any cost towards recovery efforts that go beyond the loan disbursed amount (plus simple interest) in small loan cases. Also in other cases, it is to be ensured that no infructuous expenditure is made for recovery efforts. Any such expenditure noted in future would be the personal responsibility of the Branch Manager / concerned official.

( Yaduvendra Mathur )
Chairman & Managing Director


PG Circular No. 1022/2003  

RAJASTHAN FINANCIAL CORPORATION
( FINANCE SECTION )

Udyog Bhawan,
Tilak Marg,
JAIPUR-302 005.

Ref.No.RFC/Fin/F.8(1568)/ Dated :15.10.2003

C I R C U L A R

Reg : Utilisation of Advance Instalments of sanctioned loan.  

Detailed guidelines regarding disbursement of sanctioned loan amount in advance instalment for all company cases or other than company cases where party has offered minimum 50% collateral security of the sanctioned loan amount have been laid in PG Chapter RD -8 para 9 / circular No. PG 886/2000 dated 06.12.2000.

The existing norms/ guidelines provide that Advance releasing authority would review all such cases fortnightly so as to ascertain the proper utilisation / regularisation of the advance released to the unit within 2 months. The disbursing authority may carry out monthly inspection of the unit to watch the fast implementation of the project. In case party fails to utilise the funds of the Corporation properly, instant and suitable action would be taken by the competent authority immediately. The disbursing authority may however, grant extension of one month in case of subsequent advance instalments on genuine grounds/reasons.

It has been observed that field offices are not adhering to the above guidelines strictly and due to lack of proper monitoring, some of the accounts have become NPAs. This issue was discussed in the Regional Review Meeting held on 15.09.2003 and it has been decided that in no case extension beyond 3 months would be allowed for utilisation. In case the advance instalment disbursed remains un-utilised beyond 3 months, the entire loan amount alongwith interest should be called back.

Accordingly, para 9.2.2.4 of RD-8 of PG is modified as under :

If the disbursing authority feels that there are genuine grounds/reasons for extension of time limit of two months for utilisation of advance disbursed amount, an extension of one month more can be granted after obtaining request in writing from the party. In no case extension beyond 3 months would be allowed for utilisation. In case the advance instalment disbursed remains un-utilised beyond 3 months, the entire loan amount alongwith interest would be called back.

The undertaking(s) to be obtained from the borrower/supplier at the time of release of each advance instalment, should also have a mention of the time limit for utilisation thereof. The following words are, therefore, addedat the end in Para 9.2.1.1(c) & (d)

�........within a period of 2 months failing which the Corporation shall be at liberty to call back the entire loan amount with interest without giving any further notice�.

The Branch Offices are advised to review all cases where advance instalment has been disbursed and to initiate action for calling back the entire loan amount with interest in cases where the advance amount has remained un-utilised beyond the prescribed time limit. Such cases may be informed to HO (Finance Section).

All concerned may take a note of above and ensure strict compliance of the same.

( Yaduvendra Mathur )
Chairman & Managing Director


RAJASTHAN FINANCIAL CORPORATION
( FINANCE SECTION )

Ref.No.:RFC.F.8(1568)/20 Dated : 23/26.04.2004

C I R C U L A R

Reg.: Token disbursement in Switch Over Cases.

Attention is invited towards PG Circular No. 885 dated 07.12.2000 vide which guidelines regarding release of token clean advance on the day of execution of loan documents were issued.

In switch over cases, the Corporation has been considering term loan equal to Not Due Principal of other FIs and in such cases while executing the loan documents a problem is being faced regarding token disbursement. The policy was reviewed in the PC & CC meeting held on 31 st March, 2004 and it has been decided that whenever term loans for switch over only are being sanctioned, token disbursement may not be made in such cases on the date of execution of loan documents.

All concerned are advised to make a note of the above.

( R. S. Gupta )
Gen.Manager(Fin.)


RAJASTHAN FINANCIAL CORPORATION
( FINANCE SECTION )

Ref.No.RFC/F.8(1568)/ 47 Dated : 04.06.2004

C I R C U L A R

Reg : Disbursement of balance undisbursed loan in case of minor changes/minor work left where adequate security is available .

It has been observed that in some of the cases small part of sanctioned loan remains undisbursed due to minor changes or minor work left evenafter the project is almost implemented and sufficient prime security is available. The promoters also do not take interest to avail this balance loan as their concentration is towards achieving the production. This situation leads to cancellation of undisbursed loan and refixation thereof.

With a view to liberalise and expedite disbursement in such a situation it has been decided that

(1) Disbursement against the prime security case having sufficient value and securing our loan sufficiently, full loan may be disbursed irrespective of minor changes or minor work left.

(2) In almost completely implemented projects balance undisbursed amount may be disbursed looking to the security and satisfaction of the Branch Manager.

All concerned are advised to make a note of the above.

( Sanjay Dixit )
Chairman & Managing Director


PG Circular No. /1081

RAJASTHAN FINANCIAL CORPORATION
( FINANCE SECTION )

Ref.No.RFC/ F.8(1568)/ Dated : 04.10.2004

C I R C U L A R

Sub : Delegation of disbursement powers.

 As per existing procedure Dy.Manager (looking after the work of disbursement) posted in the Branch Offices which are headed by Manager(Br.) is authorised to release money as per guidelines in cases where amount of loan sanctioned is upto Rs.5.00 lac. This matter was discussed in the Branch Managers� Meeting held on 6th & 7th August, 2004 and it was felt that in the present scenario the above delegation of power needs reconsideration for upward revision since the Dy Manager heading Branch Office enjoys full powers for disbursement ( except Joint Finance cases ).

The suggestion was considered in the PC & CC Meeting held on 16th September, 2004 and it has been decided to further delegate the powers for disbursement to Dy.Managers in Manager headed branches and accordingly Dy.Manager (looking after the work of disbursement) is hereby authorised to release money as per guidelines in case where amount of loan sanctioned is upto Rs.20.00 lac and such cases should be reported to Branch Manager on regular basis.

Accordingly the guidelines mentioned in PG Chapter No. RD-7 para 1.2 stands revised.

All concerned are advised to make a note of above.

( SANJAY DIXIT )
Chairman & Managing Director


PG Circular No. /1080

RAJASTHAN FINANCIAL CORPORATION
( FINANCE SECTION )

Ref.No.RFC/F.8(1568)/ Dated : 04.10.2004

C I R C U L A R

Reg : Disbursement of sanctioned loan amount in advance instalments.

The guidelines regarding disbursement of sanctioned loan amount in advance instalments for all company cases or other than company cases wherein party has offered minimum 50% collateral security of the sanctioned loan amount and Tourism based projects have been laid in PG Chapter RD-8 para 9 & 11 respectively (Circular No. PG-886 dated 06.12.2000 and Circular No. PG-731 dated 07.03.1997, O&M Circular No.441 dated 16.08.1997).

During discussions in Branch Managers� Meeting held on 6th & 7th August 2004, it was observed that the advance disbursement procedure laid down vide above circulars have been very instrumental in expediting disbursement and speedy implementation of the project and it was felt that the above procedure of disbursement may be extended to other cases also.

The above matter was further discussed in the 25th Meeting of the PC & CC held on 16th September, 2004 and it has been decided that PG Circular No.886 dated 06.12.2000 may also be applied in all cases where sanctioned loan amount is more than Rs. 50.00 lac provided proposed advanced instalment is sufficiently secured by prime security at unit site and collateral security (if any) available with the corporation.

Accordingly, sub-para No. 9.1(C) may be added in PG Chapter RD-8 as follows :-

 PARA 9.1(C)

�All cases where sanctioned loan amount is more than Rs. 50.00 lac provided proposed advanced instalment is sufficiently secured by prime security at unit site and collateral security (if any) available with the Corporation.�

The follow-up and utilisation of such advance instalment of sanctioned loan should be ensured as per PG Circular No. 1022 dated 15.10.2003.

All concerned are advised to make a note of above.

( SANJAY DIXIT )
Chairman & Managing Director


RAJASTHAN FINANCIAL CORPORATION
( FINANCE SECTION )

Ref.No.RFC/ F.8(1568)/152 Dated : 04.02.2005

C I R C U L A R

Sub: Display Board on Commercial and Residential Complex Financed by Corporation.

  The Corporation is obtaining an undertaking in cases of commercial and residential complex that �The company/concern shall display a board at site mentioning that the project has been financed by RFC and the purchaser shall have to obtain NO DUES CERTIFICATE from RFC before purchasing the are by them.�

However it has been observed that display board at unit site is not ensured due to which the very purpose of condition is not fulfilled.

In view of the above, it has been decided by PC & CC Meeting held on 12 th January, 2005 that before making disbursement in such cases it should be ensured that a Board mentioning �This project has been financed by RFC and the purchaser shall have to obtain NO DUES CERTIFICATE from RFC before purchasing the are by them� is displayed at site.

All concerned are advised to make a note of above.

( R.S.Gupta )
Chief Gen.Manager(Fin.)


RAJASTHAN FINANCIAL CORPORATION
( FINANCE SECTION )

Ref.No.:RFC/F.8(1568)/3945 Dated : 18.05.2005

C I R C U L A R

Sub: Mechanism for ensuring compliance of pre-disbursement condition.

All the disbursement powers except in joint finance cases have been delegated to branch offices and the disbursing authority is to ensure compliance of all pre-disbursement conditions before making disbursement of the sanctioned loan. The Internal Audit Section of the Corporation also checks on sample basis that disbursements are being made as per procedure and guidelines.

The SIDBI in its recent Performance Evaluation Report of the Corporation has advised to devise a suitable mechanism for ensuring compliance of pre-disbursement conditions by a higher authority before effecting the final disbursement.

Accordingly, it has been decided that henceforth DGM(R) would also look into all the cases wherein disbursement is being made by branch office and ensure compliance of all the conditions of the sanction letter during his visit to branch office. After being satisfied, he would record on the disbursement file that all pre-disbursement conditions have been complied by the branch office. A report to this effect would be sent by the DGM(R) to GM(Fin.), HO on monthly basis and in case there is any relaxation in the condition, the same would be reported alongwith reason, circumstances etc.

All concerned are advised to make strict compliance of the above procedure.

( Karni Singh Rathore)
Chairman & Managing Director


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